US industrial production unexpectedly dropped in Oct, weighed down by declines at
utilities, mines & automakers that signal manufacturing
started Q4 on soft footing. Output fell 0.1% after a 0.8% increase in
Sep that was smaller than previously estimated, according to the Federal Reserve. The forecast projected a 0.2% gain. Factory production rose 0.2%, matching the
prior month’s advance that was also revised down. A pickup in manufacturing is needed to help bolster the
expansion, now is its 6th year, as global growth from Europe & Japan to emerging markets cools. Rising consumer confidence & the drop in gasoline prices are brightening the outlook for
holiday sales, indicating factories will get a lift in the next
few months. Manufacturing, which makes up 75% of total
production, was forecast to increase 0.2%. The output of motor vehicles & parts decreased 1.2% in Oct, a 3rd consecutive decline, today’s report
showed. Excluding autos & parts, manufacturing rose 0.2%.

With Japan's slump into its 4th recession since 2008 threatening the failure of
the Abenomics reflation program, Prime Minister Abe’s
administration is taking steps to shore up growth for the coming year. Economy Minister Amari said there’s a high chance of a stimulus package. Etsuro Honda, an adviser
to Abe, said a ¥3T ($26B) program was appropriate &
should go toward measures that directly help households, such as child
care support. Abe is
also considering a postponement of an Oct sales-tax increase until
2017, a move that would add 0.3 percentage point to growth in the
coming fiscal year, according to estimates. At stake for the prime minister is assuring
re-election in a likely snap vote next month that may serve as a
referendum on his policies. Less than 2 years into Abenomics, a 3-pronged strategy to
pull Japan out of 2 decades of stagnation thru monetary stimulus,
fiscal flexibility & structural deregulation, the program has yet to
spark sustained growth. An Apr sales-tax rise saw the economy sink
into 2 straight qtrs of contraction, a gov report showed.

Apple said customers in China
can now use the country’s most popular payment card for
transactions on the App Store, as the iPhone maker seeks to woo
users in the world’s largest smartphone market. App Store users in China can link their China UnionPay debit or credit cards to their Apple ID accounts to make one-tap
purchases, the company said. The App Store lets
customers download programs to run on its devices such as
iPhones & iPads. UnionPay has a monopoly on bank-card clearing in China, &
has issued more than 4.5B payment cards in China &
abroad. AAPL said the new payment
option has been sought by customers in China, where the new
iPhone 6 & 6 Plus debuted last month to heavy demand. The company sold more than 10 M
iPhones in their first weekend after being rolled out in
other countries in Sep. “The ability to buy apps and make purchases using UnionPay
cards has been one of the most requested features from our
customers in China,” Eddy Cue, AAPL head of Internet
services, said. China is already AAPL’s 2nd-largest market for app downloads, he said. Last month, China’s gov indicated that UnionPay’s
monopoly on bank clearing was set to end, but didn’t provide a
timeline for the change. The stock rose 59¢. If you would like to learn more about AAPL, click on this link:club.ino.com/trend/analysis/stock/AAPL?a_aid=CD3289&a_bid=6ae5b6f7

Apple (AAPL)

Stocks continue to meander. The long recovery in the US has also been a drab one as the manufacturing data reminds us. The core of the problem is that household income is not rising as it should. Massive stimulus at the start of the recovery contributed little to accelerating growth. Now growth overseas is stumbling. But Dow does not mind as it keeps flirting with new record highs.